Good morning, good afternoon, ladies and gentlemen, and welcome to PT Bank Mandiri's fourth-quarter 2025 results briefing. Thank you all for joining us today.

My name is Laurensius, Head of Investor Relations. Together with us today as speakers, we have Ibu Novita, our CFO; Pak Danis, our Risk Director; and Pak Sunarto, our IT Director.

Before we start, I strongly encourage you to download both our presentation material and financial statement, currently available in the IR webpage of Bank Mandiri. Ladies and gentlemen, we will start the analyst meeting or earnings call with a presentation from the board of directors, followed by the Q&A session.

During the Q&A session, please use the raise-hand button function and ask the questions. Please mention your name and institutions followed by your questions.

We're also happy to take questions via email afterward, and we'll try our best to reply to your questions as soon as we can. Now to start, I would like to hand the presentation to Ibu Novita, our CFO.

Silakan, Bu Novita.

Thank you, Lau. Ladies and gentlemen, I would like to begin the presentation with a brief overview of macroeconomic environment and Bank Mandiri's positioning.

Overall, the economy remained relatively stable, with 4Q '25 GDP growth at 5.39%, supported by stronger consumption activity. Until the fourth quarter of '25, Bank Indonesia maintained its dovish stance, delivering a total of three rate cuts amounting to 75 basis points between June and September, bringing the benchmark rate down to 4.75%.

We expect BI to maintain their dovish stance with two additional rate cuts with total 50 basis points anticipate in '26. This will support economic activity, which will drive the loan demand.

In fourth quarter, we disbursed a loan to SOE in charge, which led to a Bank Mandiri bank-only loan growth of 14.2% year on year, outperforming industry growth of 9.7%. If we exclude this loan, Mandiri loan growth expanded by 9% year on year, in line with our guidance.

On the deposit side, we saw an improvement in the liquidity environment, reflected in industry deposit growth 13.8% year on year, while our bank-only deposits grew strong at 26.2% year on year. The improvement is driven by better liquidity environment and SAL placement for SOE in charge of Village Cooperative Program.

If we exclude deposit from the government placement SAL, our deposit still grew robust at 22% year on year. Lastly, as we maintain our prudent underwriting, our asset quality remained robust, with NPL ratio at 0.96%, well below the industry average of 2.18% as December '25.

The key strength and challenges during—now we focus under the key strength and challenge during the quarter. Up until December '25, we observed a notable improvement in our cost of fund, supported by a more optimized deposit pricing mechanism.

Our asset quality also remained resilient despite ongoing macroeconomic headwinds, reflecting prudent risk management and continued improvement in net NPL formation. We also delivered strong non-interest income growth of 14.5% year on year, further strengthening our revenue.

On the challenge side, we saw a yield pressure stemming from competitive loan pricing in a declining benchmark rate environment. While our ability to price higher-yield lending loans remained limited, improvement in funding costs and liquidity condition have allowed us to safeguard NIM stability.

Meanwhile, retail loan growth remained modest, with 1.8% year-on-year growth in 12M '25, as we deliberately maintained a prudent stance amid softer retail economic condition. We will remain selective in expanding our retail portfolio book and focus on value-chain-based lending.

Lastly, opex growth remained elevated, continuing from the previous period due to post-audit adjustment. However, our internal efficiency initiative helped maintain consolidated opex growth stable at 15% year on year, with consolidated CIR at 43.5% in 12M '25.

Our CIR level has improved from 44% level in 9M '25. As a result, in 12M '25, our consolidated loan growth grew by 13.4% year on year, above our guidance level, as we disbursed to SOE in charge of Village Cooperative Program.

If we exclude this loan, our loan growth was at 9% year on year, in line with our guidance. Our net interest margin also managed within our guidance level, with 12M '25 at 4.89%.

Lastly, our provisioning remained ample, with current level at 58 basis points, better than our guidance of 80 up to 100 basis points, due to healthier credit profile with lower net downgrade. Now let us move on to profitability metric of the bank.

Overall, net profit trajectory showed an improvement on quarter-on-quarter basis. In fourth quarter of '25, our net profit reached 18.6 trillion rupiah, increased by 39.8% Q-on-Q and 35% year on year.

Additionally, our PPOP also improved to 25.7 trillion rupiah, up to 22% Q-on-Q and year on year. On the lending side, we maintain a disciplined stance.

Our consolidated loan portfolio grew 13.4% year on year to 1,895 trillion rupiah. In parallel, we continued to strengthen our liquidity, with CASA deposit rising 12.6% year on year to 1,431 trillion rupiah, supporting balance sheet stability.

Improvement in liquidity condition helped lower the bank cost of fund. On the other hand, loan yields stood at 7.55%, resulting to stable NIM of 4.89% for the full year '25.

Risk discipline remained a key strength. Cost of credit improved to 58 basis points, reinforcing asset quality and overall balance sheet resilience.

Return on assets stood at 2.14%, while return on equity improved to 20.3%, underscoring our consistent ability to deliver healthy and sustainable return amid a challenging macroeconomic environment. Ladies and gentlemen, the chart above shows loan growth by segment, where wholesale led the overall growth in 2025.

In fourth quarter '25, corporate loans grew strongly by 14.6% Q-on-Q and 23% year on year, largely to one of government strategic program related to the village cooperative funds, followed by commercial loans, which grew by 4.28% Q-on-Q and 12% year on year. Growth of our retail segment focused on the value chain pipeline.

Considering risk and the overall macro environment, we continue to manage our exposure to auto loan and mortgage, as we observed deterioration to certain extent on industry level, while growing SME and payroll loans selectively, prioritising disbursement within our value chain ecosystem. Importantly, improved deposit growth environment enabled us to manage the loan-to-deposit ratio, with LDR at 88.9% as of December position.

It is worth noting that the average daily LDR in December '25 was 93.9%. As a result of this disciplined approach, we successfully maintained net NPL formation at 0.77% in December '25, reflecting strong asset quality and sound risk management.

Next is our margin performance. Overall, our NIM stayed resilient throughout the fourth quarter of '25.

As fourth quarter '25, NIM stood at 4.89%, relatively stable compared to previous quarter, as pressure on loan yield was offset by lower cost of fund. Bank-only loan yield declined to 7.24% in fourth quarter '25, driven by lower yield across segment.

The decline was most pronounced in the corporate segment, reflecting our participation in SOE in the charge of Village Cooperative Program, which carries a lower yield than our average corporate portfolio. However, our bank-only cost of fund has shown further improvement, declining by 16 basis points to 2.15% in fourth quarter '25 from 2.31% in third quarter '25 year-to-date, supported by repricing our special rate deposit as liquidity environment is improving.

The improvement on cost of fund helped to offset the yield pressure, allowing us to sustain healthy margin within 4.8 up to 5% range, in line with our '25 guidance. Overall, our NIM remained well-managed.

However, we expect slightly NIM pressure in full year '26, as the pressure on the asset yield is expected to remain, yet we expect room for cost of fund improvement due to the better liquidity environment. Thus, we are cautiously guiding our NIM at 4.6 up to 4.8% in full year '26.

Now let us turn to non-interest income and operating expense. As of December '25, total non-interest income grew 14.5% year on year, driven by strong treasury income and recurring fee income from both digital and non-digital channel.

Our organic recurring fee income grew by 15% year on year in full year 2025. We expect non-interest income to continue strengthening our revenue profile, with growth expectation of mid-high single digit, as growth of recurring income from digital initiative could offset the flattish treasury income and cash recovery from wholesale segment.

On the cost side, we observed slight opex increase by 2.48% Q-on-Q in fourth quarter in '25. However, we were able to maintain our CIR at 43.5% in fourth quarter of '25, which is better than our recorded figure of 44.5% in third quarter of '25.

This reflects our active efficiency measure and gradually normalization of operational activities. Overall, we expect normalization of CIR and opex growth in '26, with mid to low single-digit growth on consolidated opex.

Our consolidated CIR is expected to reach 42 up to 43% for the full year '26. We continue to pursue a disciplined cost management and align expenditure with strategic priorities.

On asset quality, as of December '25, loan at risk remained stable at 6.51%, while the cost of credit declined to 58 basis points, reflecting the result of our strategy in maintaining discipline and well-managed portfolio. Loan-at-risk coverage remained strong at 40% on a consolidated basis and bank only, providing a buffer against downside risk.

Our NPL coverage also remained robust, with bank-only coverage at 253% and consolidated coverage at 231% as of December '25, higher than our pre-COVID level. Looking ahead, we expect normalization in asset quality metrics, including a modest increase in cost of credit to the 0.6 and 0.8% range from 0.58% in full year '25, reflecting normalization from historically low level.

Loan-at-risk ratio also expected to go up slightly, although overall asset quality fundamental is expected to remain healthy, supported by adequate coverage and continued discipline in risk management. Now let's discuss on our '26 guidance.

On loan growth, we maintain our guidance at 7.9% year on year. We continue to see healthy demand, supported by government-related spending and a more accommodative monetary environment.

Our strategy continues to prioritize balanced growth across wholesale and retail, while gradually increasing the share of investment loan, which are more value accretive and better aligned with our profitability objective. On liquidity standpoint, we remained disciplined in applying our loan-follow-deposit strategy.

We expect LDR remain well-managed at around 95%, supported by prudent liquidity management and balanced deposit growth strategy. This allows us to preserve balance sheet flexibility while still supporting credit expansion.

On margin, we expect full-year '26 NIM to be in the range 4.6% to 4.8%, as we anticipate more pressure on loan yield. However, improvement in cost of fund, better system liquidity, and portfolio mix optimization should help maintain the downside.

On asset quality, we expect net NPL formation to continue improving, underpinned by our prudent approach in retail expansion and our value-chain-driven growth strategy. Accordingly, we guide for a cost of credit of 60 basis points to 80 basis points in full year '26, reflecting on conservative and proactive risk management.

We expect normalization of CIR and opex growth in '26, with mid to low single-digit growth on consolidated opex and consolidated CIR of 42% up to 43% in full year '26. Overall, our guidance has accommodated potential liquidity and risk event due to the macroeconomic surprise.

As we continue to pursue a disciplined growth, strong liquidity management, and disciplined cost control, we remain positioned to deliver more focused, sustainable, and higher-quality returns going forward. Now I would like to hand the presentation to Pak Danis, our Risk Director, to explain more about the asset quality.

Please, Pak Danis.

Thank you, Ibu Novita. Ladies and gentlemen, allow me to provide an update on our asset quality as of December 2025.

In line with our conservative loan growth strategy, asset quality remained resilient, reflecting disciplined underwriting amid a challenging macro backdrop. In December 2025, loan at risk improved to 6.51%, showing an improvement trend which supported by selective growth in positive sectors within the wholesale segment and targeted expansion through our ecosystem value chain in retail segment.

Going forward, we expect LAR to remain stable to slightly up to more normalized level, with NPL formation manageable across both wholesale and retail segments. We remain well-provisioned, with consolidated LAR coverage of 39.9% and NPL coverage ratio of 231%, providing a solid buffer against downside risk.

Consequently, our cost of credit stood at 58 basis points in December 2025, below our full-year guidance. Looking ahead, we aim to maintain stable asset quality, underpinned by robust risk management and the strength of our value chain strategy, which drives high-quality growth.

We expect cost of credit to normalize, reaching 0.6% to 0.8% in full year 2026. Additionally, we also expect normalization of NPL coverage to 230% to 250% in long term.

Finally, let us discuss our capital positioning. As of December 2025, Bank Mandiri capital adequacy ratio declined slightly to 19.4%, primarily reflecting a higher dividend payout ratio.

Looking ahead, we aim to maintain CAR and Tier 1 in a range 18% to 20% in over the near to medium term, balancing capital efficiency with sustainable growth. Now, I would like to pass on the presentation to Pak Sunarto, our IT Director, to continue the presentation on our digital.

Please, Pak Sunarto.

Thank you, Pak Danis. Ladies and gentlemen, let me start with the digital sections.

I think before I am going to explain slide by slide, I would like to introduce by, I think over the past four years, the bank has been investing a lot in digital transformation, including the technology, people, and until today we have more than 4,100 people working in the IT division. I think the fair question today is what we have delivered today and what is the outcome.

I want to start by saying, as you see in the title of this slide, we can safely conclude that digital has become the operational backbone of the bank. All the digital platform in this bank, including Livin', Kopra, Livin' Merchant, all of them are operating at a national scale.

If you look at the chart on the left-hand side, on 2025, more than 80% of the transaction in this bank has been done through the digital platform. The 20% remaining is coming—transaction is coming from EDC, ATM, and branches.

If you're looking at the only branch-only transaction, it is accounting less than 2%. Most of the transaction now, if I calculate all of them, 98% either is done through digital platform or through the machine.

Let me start by the journey of the customer. Today, 90% of the new-to-bank customer opened their account through Livin'.

This telling us that the cost of acquisition is much, much lower compared to the conventional channel. What is the most important thing is Livin' has become the default onboarding channel.

Almost nine out of 10 customers stepping their foot into the Bank Mandiri branches or even opening their account anywhere in the world now are doing it via the Livin'. As a result, all of the transaction activity, in the bottom of the chart, is 99% are going through the transaction in the Livin', Kopra, and Livin' Merchant, making the digital channel the primary transaction engine in the retail banking.

Next. As I mentioned before, all of the digital channel today are become the operational backbone of the bank.

The next question is what is the quality of the growth? If you see all the three charts displayed in this slide, you can see that transaction growth outpaces user growth across wholesale, value chain, and retail.

In the wholesale where Kopra is our main platform, the transaction frequency is growing at an index of 240. It means that the transaction is growing 140% compared to what we see in 2021.

The customer base has increased to 155. That means transaction activity is growing roughly at 1.5 times faster than users.

The middle chart showing that the value chain that we derived from the wholesale platform wholesale clients, name it suppliers, distributors, payroll, and merchants. If you see, the transaction frequency has been growing at the index of 374 versus a customer base as 204.

This is a very strong signal that the growth is driven by deeper participation within the ecosystem. In retail, the numbers tell us the same story and even more pronounced.

Transaction frequency has grown to 949, 10 times larger than what we see in 2021, while the customer base stands at 518. Transaction intensity in this case is growing nearly two times the pace of the customer growth.

This tell us the acquisition is not driven by promotion or any one-off signups. All of the customer are entering into the platform because the platform is delivering a use case that fits into their needs.

What is the most important is that the pattern is consistent across wholesale, value chain, and retail. This is the platform effect rather than a segment-specific spike.

Next. What is the implication of the high transaction volume that we try to translate into the CASA quality?

In wholesale clients, let's look at the current account balances. 65% of the current account balances are coming from clients transacting more than 80 times per month, while another 25% are coming from clients transacting 20 to 80 times per month.

This means more than 90% of the wholesale balances are generated by the customer with frequent and repeat operational activity. In the retail, the similar patterns emerged.

Around 55% of the balances are coming from the client transacting more than 20 times transaction per month. This 20-time per month is ranging from 20 times up to 100 times or even more than 100 times.

Another 30% are coming from clients that transacting six to 20 times per month. In total, more than 85% of the balances of the saving account in this bank are supported by active and engaged users.

These are the sticky balances. These balances support the day-to-day operations of our customer.

Next. This slide is always the KPI of any IT division running the digital.

I want to draw everyone's attention to the cost per transaction. The digital growth in Bank Mandiri is decoupled from the cost growth through automation, standardization, and scale.

Since 2021, digital transaction has grown to an index of 386. It's growing more than four times, while the cost per transaction has declined to 44, representing a reduction of more than 55%.

At the same time, fee-based income per user has increased to 145, indicating that monetization improved even as unit costs fell. This is not a one-off efficiency gain.

This trend has been consistent over multiple years. The cost driver that we achieve, the cost advantage that we achieve is coming from three main sources.

Number one is high automation and straight-through processing. Almost all transactions that's coming through Livin', Kopra, Livin' Merchant are without human intervention.

All of them are performed digitally, 100% straight-through processing. Another cost efficient that we achieve is platform consolidation.

I think we have consolidated platform and reduced overlapping system and licenses, lowering fixed technology cost, and therefore give us some cost advantage. The last one is the most important thing: all of the digital platform in this bank are standardized.

Our people that accounted for more than 4,000 people can do as one team to build, operate, and maintain multiple system efficiently. This is some of the cost driver that we try to maintain over the past four years.

Next. Livin'.

To understand the numbers that we have just seen, I think it is important to understand how do we develop Livin' from the beginning. Livin' from the day one, we built by design as a unified platform, integrating core banking services, subsidiaries, and client ecosystem.

If you look at the table on the left side, we have developed more than 150 features over the past four years, ranging from save money, move money, borrow money, and grow money. Many of them are first in the market.

Those transactions generated from the features generated a huge traffic for this bank. Then we shifted to integrating subsidiaries in this bank.

Livin' in the past two or three years has become the distribution channel of our subsidiaries. If you look at the middle table, Livin', we are integrating Livin' with Mandiri Utama Finance and Mandiri Tunas Finance, allowing our customer to apply loan directly from Livin' and our customer can got the confirmation of their approval within just five to 10 minutes.

Everything is done through the Livin' platform. Customer are do not need to fill a lot of information because everything is well integrated with the subsidiaries.

The integration that we make with the Mandiri Sekuritas, allowing the customer to buy and sell stock instantly inside the Livin'. The new one, we just integrated with AXA Mandiri, where we allow customers to buy some insurance while they're transacting with the e-money.

For your information, e-money in Mandiri, we control 60% of the market share. This allowing to boost the sales of AXA Mandiri inside the platform of the Livin'.

Last but not least, ecosystem is one of the most important part as far as digital is concerned. Inside the Livin', we have been integrating 1,600 billers, ranging from e-wallet, electricity, e-commerce, insurance, telecommunications, and many more.

Those are the daily use cases for our customer, and therefore we generate a huge traffic inside the Livin'. Below are some numbers about the registered users, transaction frequency, and value.

I don't think I want to repeat all the numbers, and the numbers growing around CAGR in two years around 28%, both in users, frequency, and transaction value. Next.

On the merchant side, Livin' is developed for retail users. There's another significant cost funding source that we want to address, which is the merchant side.

Merchant side is an application used and developed by the merchant—sorry, and used by the merchant for payment acceptance. We have launched this product two years back in 2023.

This is the roadmap of our Livin' Merchant. We started the Livin' Merchant as payment acceptance.

It allowed the merchant to receive payment from QR, card, and transfer. Then we developed the Livin' Merchant further becomes the point of sale, allowing the customer to put in all of their activity inside the Livin' Merchant.

The yellow box one is the most important one for Livin' Merchant, where we integrate our wholesale customer with the merchants, allowing our merchants to order, pay all the inventory that directly connected with our wholesale ecosystem. If you look at the chart on the right-hand side, Livin' Merchant has growing significantly in past two years and exceed the EDC traditional payment acceptance machines.

Livin' Merchant is one of the platform that I think we are really looking forward to penetrate the market for the merchant segment. Next.

Kopra is built for our wholesale customer. Today, I think the whole full year last year, we booked around 27,000 trillion rupiah.

This is the all volume generated by our wholesale customers. Frequency is around 1.5 billion.

This is a completely different DNA with the retail customer. The ticket size is very high, we don't—so the focus is on the transaction volume.

The service that we built inside the Kopra, ranging from cash management, trade finance, and value chain. Recently, we just add some AI capability inside Kopra.

We allow the customer to do their cash flow forecasting and transaction risk scoring, where every transaction flow into the Kopra will be sent to the AI engine to have some scoring whether the transaction is fraudulent or not. AI for trade finance, we are going to launch very soon that allow the customer to upload their document, then automatically scan through the AI machine to check the consistency of the document they upload into the system.

Those capabilities are available for three segments of the customer: that are pure domestic in Indonesia operating company, or Indonesia company operating at overseas, or any MNC company operating in Indonesia. Next.

We have been spending four years developing every single feature in every single platform. Now I think digital platform in Mandiri, the way to differentiate ourselves from our competitors is how do we connect all of them.

In last two years, we have been link Kopra, Livin' Merchant, and Livin' together. Kopra and Livin' Merchant, the linking process is we allowing customer and our wholesale customer to upload their inventory, and allowing the merchant to buy the product inside the Livin' Merchant.

The same story for Kopra and Livin', allowing the customer to upload their bill, and customer can pay through Livin' immediately. These are the three use cases that we try to build within the digital that we build in Bank Mandiri.

Next slide. AI has been a trending topic in the past two years.

I think for the bank is very simple. The objective is very simple: we want to make our customer to be very productive, and then we focus on the four use cases that we want to build.

Number one is around customer service and document automation. Number two is how do we implement AI in fraud and risk and compliance.

The last one is sales, marketing, and revenue growth. We also implement AI inside the IT division, allowing our IT developer to faster the development process.

This can account for 50% reduction of time. I don't want to go through every single bullet point, but one of the key use cases that we want to launch very soon is about transaction risk scoring, which allow identify transaction anomalies using AI and machine learning methods.

Sales, marketing, and revenue growth, I think we have been implementing a lot in Livin', personalization, campaign, customer journey, sentiment analysis, and property appraisal. This is conclude my presentation in the digital part.

Now I want to pass to Pak Danis for the next presentation.

Thank you, Pak Narto. Now, let me provide an update on our sustainability initiatives.

In 2025, Bank Mandiri achieved a significant milestone on our ESG journey, receiving outstanding results from two leading global ESG rating agencies, which are from MSCI ESG Ratings and Sustainalytics. From MSCI ESG Ratings, our score increased by two levels, or double notch, from BBB to AA, a remarkable leap that underscored the strengthening of our governance, risk management, and disciplined ESG implementation across business processes and operations.

Meanwhile, the latest assessment from Sustainalytics positioned us in the negligible risk category, with an ESG rating score of 9.5, reflecting the company's strong ESG risk management. Sustainalytics apply a scoring methodology where a lower score indicates better sustainability performance and ESG risk management.

These two achievements highlight Bank Mandiri's position on par with and even surpassing other banks in Southeast Asia region. This achievement reaffirmed that Bank Mandiri is not only strengthening its internal ESG foundation, but also shaping the broader sustainability landscape in Indonesia.

As we continue this journey, we remain committed to continuously drive meaningful sustainability efforts. Next.

As a result our active engagement with client and related stakeholders, Bank Mandiri lead with over 35% market share in green financing, aligned to support Indonesia net-zero emission target. As of December 2025, Bank Mandiri sustainable portfolio reached 316 trillion rupiah, representing 8% year-on-year growth.

This portfolio is composed of green and social portfolio. The green portfolio reached IDR 166 trillion, growing 11.7% year on year, while the social portfolio stood at IDR 150 trillion, with 4.1% growth year on year, with NPL quality well-maintained.

Our sustainable portfolio span on a several key sectors, including sustainable agriculture, renewable energy, eco-efficient products, and clean transportation. Furthermore, Bank Mandiri has developed a comprehensive product suite of sustainable financing solutions to drive measurable environmental and social impacts.

This includes sustainability-linked loans, which link financing terms to borrower sustainability performance through clearly defined environmental, social, and governance targets. In parallel, Bank Mandiri has expanded its sustainable funding instrument to support green and social projects.

In 2025, Bank Mandiri successfully launched green bonds phase two and sustainability bond phase one, further strengthening its capacity to mobilize capital for sustainable projects. Together, this initiative strengthened Bank Mandiri role as a key enabler of Indonesia sustainable transition, supporting business and communities to grow responsibly while advancing long-term economic resilience.

To continue my presentation, our sustainable operation pillar, we continue progressing positively on our environmental footprint and also fostering diversity and equity. In 2025, we have reduced our operational emissions up to 32% from baseline in 2019 through carbon-neutral initiatives, including the expansion of solar panels, adoption on electrics and hybrid vehicles, installation of charging stations, and the development of green buildings and offices.

Moreover, Bank Mandiri also promotes fair and equitable workplace, where women make up 52% of total employees and 46% of women are in manager grade or higher. Next, on our sustainability beyond banking pillar, we are eager to build an inclusive financial ecosystem that align with the SDGs and empowering underserved communities.

Our CSR activities support variety of audience through programs such as Mandiri Sahabatku, Mandiri Sehat, Mandiri Difabel, Mandiri Peduli Sekolah, and many more programs. We also expand inclusive financial access, particularly for MSMEs in non-urban area through Livin' Merchant by Mandiri.

Here, we are expanding access to digital financial services. To date, 62.7% of 3.1 million MSMEs are based in non-urban regions.

Throughout this initiative, we continue our commitment to build a more inclusive financial ecosystem that align with Sustainable Development Goals and empowers underserved communities. That concludes our ESG updates, and now I will pass this presentation back to Lau for the Q&A session.

Thank you.

Great. Thank you very much to all speakers.

Ladies and gentlemen, we're now opening the session for the Q&A. Again, as a reminder, if you have any questions, please press the raise-hand button and wait until your name to be called, unmute your microphone, and ask your questions.

Don't forget to mention your name and institution. We can't see the names, operator, if you can please just highlight who are raising their hands.

All right. Okay.

First question come from the lines of Olivia of Goldman Sachs. Please ask your question.

Thanks.

Hi, can you hear me?

Yes. Is it Olivia or Melissa?

It's Melissa.

Thank you for taking my questions. I just have two to start with.

Can you just remind us again, in terms of your opex, what was the amount of the accounting difference or the accounting that you had to add in for this whole year? Earlier you mentioned that the guidance for the full year was 25% growth year on year, but we are coming in at, I think it was in my calculations, about 17%.

Will there be some spillover to next year? That's my first question.

Right, thanks, Mel. Let me just address that question.

The amount of the one-off accounting-related opex for the full year 2025 is about 10% of that number. You're correct, we previously talked about 25% growth target for 2025, and we ended the year with about 17% growth.

That doesn't change the amount that we dealt with, the one-off that stayed. However, we were able to basically work on efficiencies on the side, which basically led to a lower opex on the business-as-usual sort of context.

To your question whether or not there is a remaining or residual of one-off opex that has to be carried toward 2026, the answer is we don't have any of that. Does that answer your question?

Yeah. Then the follow-up is, because I think earlier you said that opex growth would be low to mid-single, am I right?

Yes, correct. That would be that's on a consolidated basis.

On a bank-only basis, we're expecting, low-single-digit, if not negative growth. On a consolidated basis, which basically includes subsidiaries such as the like of BSI in it, the number would be mid to low-single-digit growth on the opex.

If we think about it, this year is about 17% year-on-year growth. You said 10 percentage point of that was the accounting.

Underlying is 7 percentage growth. Then if we go on to the next year and you're still guiding to low to mid-single, then wouldn't underlying growth be pretty high?

Because we should knock that 10 percentage points off, right, and grow from that base upwards?

Yeah. A big part of that comes from our subsidiaries.

We'll, we can talk about the details, but the one that actually dragged the growth on the higher end—as in higher end being, mid-single digit, more mid to low-single digit for 2026—is largely from the subsidiaries. This is related to some investment that is required in that front.

All right. Okay.

Then just my second question would be your credit cost. If we look at your credit cost slide, which I think you have a detailed one, provision by segmentation, we do there is some write-back in the commercial and corporate segment.

Your bank-only credit cost is 34 bps, and your subsidiaries is much higher. Next year you're guiding to 60 to 80 basis points.

Can you share what your bank-only credit cost is and your subsidiaries? Because I think in that workout, just wondering whether there is that 60 to 80 a normalized level, or is that also considering that you still would see some write-backs in the corporate and commercial space?

For

to answer your question about the credit cost, our credit cost bank only '25 is around 40 basis points, and consolidated basis is 50 50 basis points. Why our credit cost this year last year is decrease, yeah, if we compare with the previous year, because it's result, this is the result of our improving in our loan at risk condition, and we also revise our methodology on the how we calculate our our provision.

We want to classify based on each of model. We separated our model between the secured loan and unsecured loan, and it resulting improving on the LGD model.

The impact of the improvement on the modeling itself is improve around 20 up to 30 basis point of our cost of credit. It only happened in '25, and that's why in our guidance this year 60 up to 80 basis point, because we want to normalize, we don't calculate again the reversal impact regarding to the improvement on the model.

Just to add to Ibu Novita's point. The 60 basis point to 80 basis point would imply a bank-only cost of credit of about 40 basis point, and 20 basis point on top of that number would be those pertaining to the subsidiaries, essentially.

The modeling that we have on our cost of credit is, something that is deeply discussed with our auditors and everything. Clearly we want to ensure that the provisioning that we apply is sufficient and adequate.

The provisioning level that we have currently on the bank, which is about 2.5%, is also very much in line with the expected credit loss that the bank is actually computing.

Also to add explanation from Lau, our loan portfolio right now is under stage one, majority. It's more than 99% our loan portfolio considered as stage one.

Our model to in stage two and stage three, we already calculate with 100% PD, and LGD will improve because of our effort to do some collateral recovery.

Right. I'll leave it to someone else to ask, and then I'll come back if we have time.

Thank you.

Thanks, Mel. Next questions come from Jayden, Macquarie.

Please ask your questions.

Hi, Mandiri team. Thank you for the opportunity.

I had some follow-up questions on the topic of credit cost and provisioning. Maybe I'll ask that first.

The coverage ratios came down through the year. What's the kind of comfort level?

Because they're back at 40% loans-at-risk coverage, which I remember that was the goal a few years ago. Is it possible to run this lower if we need to?

Or would we have to stay at current levels and sort of match with formation? That's my first question.

I have a couple of others.

The coverage level will actually stay flat if not upward. The level of comfort on coverage for all the layers, right, NPL coverage, loans-at-risk coverage, right now we're at 230% NPL coverage on a consolidated basis, but 250% on a bank-only basis.

Our comfort level of NPL coverage is anywhere between 230 to 250 for the bank-only basis. On a LAR context, loans at risk, anywhere around 40% is where we want it to be.

If the question is whether or not we are aiming at, a meaningfully lower LAR coverage from where we're at now, which is 40%, the answer is no. That is exactly also one of the reasons why we're expecting higher cost of credit in 2026.

Considering the uncertainties and, all the volatility that we're facing, we want to have a good buffer on the coverage and hence the higher cost of credit, and we're expecting to have higher LAR coverage as well. On an LLR-to-loan ratio, now I'm touching on this because there's many of you that's also looking at the coverage level on the broader level, which is the LLR to loan, we are basically matching the LLR to loan to our expected credit loss, which is essentially a function of PD and LGD and everything else.

At the moment, ECL for Bank Mandiri is at 2.5%, 2.6%, which as a reminder is not comparable to any other banks that has more retail loans, micro, whatever, consumer loans that has higher ECL and hence higher LLR to loans, naturally. That would be my answer to the question, Jayden.

Thank you, Lau. Then my next question, I saw there was an announcement where you will deconsolidate Bank Syariah, and I note that these accounts have not yet done that.

Would you be able to talk us through what the implications would be? Would it make the ROE better?

Would it improve the capital ratios? Any thoughts on what this event is going to mean for the group?

Yeah. Deconsolidation is the impact of removal a special authority because last year, because the strategy from our shareholder, ultimate shareholder, that remove our what we call surat kuasa khusus, ya, special authority to consolidate BSI.

Because of this activity, the impact is we cannot control and consolidate BSI anymore. Right now, we still work in with our legal consultant, accounting consultant, also our external auditor, to make sure that everything is under regulation, and we want to make sure that all the we follow all the regulation.

There is no transaction. Impact on the balance sheet, asset and liabilities will deconsolidate from Bank Mandiri consolidated, but in terms of revenue recognition, we still acknowledge the revenue from the BSI earning after tax based on our shareholder our ownership on the share.

It's around 51%. We will record it as other revenue on the consolidated basis by equity method.

The impact is revenue still same, but on the asset side, liabilities side will deconsolidated. It will improvement on the return on asset.

Improvement also on the NPL ratio. The impact is on the return on asset is around 10 basis point.

Improvement on the NPL is also around 10 basis point. Then the impact of the revenue is zero.

Thanks, Bu Novita. Maybe just to check, my final question is on capital.

What would it do to the Tier 1 ratio for the bank? Then if you could also comment on what your plans are for the dividend as we get into the AGM?

That was my last question, and thank you very much.

Our long-term strategy, we want to maintain our Tier 1 capital ratio is around 17%, and our total CAR is 19%. With this ratio, we already anticipate dividend payout ratio is around 65 up to 70% dividend payout ratio.

I think in the long term, 70, 65 up to 70% is a stable, stable ratio for us right now. That's why, Jayden, in our loan guidance, because we want to make sure the balancing asset quality and then capital and also cost of fund as well, in our loan guidance is only 8 to 10%.

Thanks very much, Bu Novita.

Thank you, Jayden. I think we'll take the next question from the line of Harsh Modi, JPMorgan.

Please ask your question.

Hi. Thanks for this.

A couple of questions. First, on December versus November cost of funds, has it improved or has it deteriorated?

Was that November-December, you're asking, month to month?

Improve.

The answer is it improved

month on

month. Yes, correct.

Even in December. Thanks.

On a month-on-month improvement.

Great. Thank you.

Sorry, across all products, we're seeing improvement in current account, time deposits, and all, yeah. Go ahead, Harsh.

Second one is on restructured loans. There was a pickup in fourth quarter.

What led to this pickup, and should we read through from this in terms of NPL going forward or not really?

Which pickup, Harsh? Sorry.

Restructured loans.

Okay. The pickup of restructured loans came on a consolidated basis.

The number that you're looking at is a consolidated basis pickup, and that came from our subsidiary, the bank, BSI, basically. It's basically the unfortunate natural disaster event that Indonesia had to deal with, and there's some restructuring action that we have to do.

The restructured book increased on the back of that particular event, and that comes from our subsidiary. Now if you look at the restructured book of the bank only, of just Bank Mandiri standalone, the restructured ratio is actually flat to slightly down.

There is quite substantial exposure of our subsidiary in that region that were impacted by the flood.

Okay. Thanks.

The other one is on credit cost and NPL. If, let's say, that NPL formation is higher in 2026 compared to expectation, would you stick with your credit cost guidance and lower coverage, or would you look to take higher provisions above guidance, in case NPL formation is higher than what you anticipate?

Thank you.

Okay. Knock on the wood, ya, Harsh.

If something force majeure happen, we will increase our cost of credit. We do not want to sacrifice our coverage.

Thanks. Last question: talked about the change in methodology that led to LGD improvement.

You said a bit about secured versus unsecured. Could you give slightly more detail about what led to the change in methodology?

I also see risk weight has reduced for overall from 64 to 58 year on year. Are both of these interlinked, and how do we think about lower risk weight and lower LGD?

Thank you. That is my last question.

Basically on the coverage computation and decision around cost of credit, we obviously have to at the end of the day calculate the entire ECL of the bank, PD, PD macro, whatever, LGD, and the rest of them. Now what we meant by improvement of the model is essentially the focus that we've been having toward collateral-based lending, on and so forth, automatically basically brought down the overall LGD part of that equation, especially on the LGD, because that's where the bank can actually take a much more meaningful action in ensuring that the LGD is good and proper on the back of focusing on good collateralized loans, etc., etc.

That is what we refer to. Now as regard to the RWA decline, now I think it's worth noting some of the event that happened in the month of December.

As so basically if you look at the balance sheet table and you look at the balance of cash, right, the balance of cash increased meaningfully on a Q-on-Q and year-on-year basis. The increase of cash is about 100, 100-something trillion.

I forgot the number, but you can look at that number. Now the increase of that cash is on the back of a huge deposit inflow.

A big deposit inflow that happened toward the end of last year, which obviously not something that we can simply disperse as loans within one or two weeks, so that goes into cash. The risk-weighted assets or the risk-weighted asset density, which is RWA divided by asset, declined toward a 50% level range.

I think about 58%. That is a result of an increase of the cash component inside the balance sheet, and the cash component comes with a 0% ATMR—the 0% risk-weighted assets.

If that cash either goes away or gets reallocated toward other forms of assets, then automatically you will see an increase in the RWA density or higher RWA. Now it happens that your number is the 31st December number, but that is just the explanation of why the ratio is very low, that it shouldn't be that low, basically.

Got it. Thank you so much for that.

Thank you, Harsh. I think there is no other questions remaining.

There's some questions coming from the emails, WhatsApps, and from another platforms. We'll try our best to address your questions as soon as possible by the end of today.

With this, I will end the presentation. Thank you very much to all participants, investors, sell-side analysts, buy-side analysts.

Thank you to all speakers, Bu Novita, Pak Danis, Pak Narto, and we would like to conclude the fourth-quarter results briefing. Thank you very much, everyone.

Have a good evening.